Safeco Life Insurance Co. in Redmond, Wash., said Monday that its sale to a group of investors led by White Mountains Insurance Group Ltd. and Berkshire Hathaway Inc. for $1.51 billion is now complete.
The parent Safeco Corp. has said it will use about $710 million of the proceeds to pay down debt and will return $620 million to shareholders through the repurchase of 13.2 million shares. About $150 million is to be held by the parent company for future uses, the company said. The company also reduced its line of credit, which runs through September 2005, to $300 million from $500 million.
After 47 years of operating as part of Seattle's Safeco Corp., Safeco Life will remain based in Washington; it is one of the nation's top 50 life insurance companies based on assets.
Separately, the holding company formed by Safeco Life's investor group announced it has quit the mutual fund business. Safeco Asset Management, which managed the Safeco mutual funds, has been replaced by Pioneer Investment Management Inc., a Boston asset manager. Subject to trustee and fund shareholder approval, it is proposed that the $3.6 billion of assets in Safeco's 22 mutual funds will become part of the Pioneer family of funds. This shift is expected to be completed by yearend.
Safeco Life, which will adopt a yet-to-be-announced name on Sept. 1, has more than 1,200 employees and had more than $22 billion of assets figured by generally accepted accounting principles at June 30. Through its network of 20,000 independent agents and advisers, the company sells annuities, life insurance, group employee benefits, and retirement plans to two million customers throughout the United States.
